Related Links

Nadel receivership is still on the trail of funds, still receiving fees

Published: Monday, July 16, 2012 at 1:00 a.m.

Last Modified: Saturday, July 14, 2012 at 5:10 p.m.

It has been 3 1/2 years since the Arthur Nadel Ponzi collapsed, but battles over money from the scheme continue to play out in federal court.

In recent days, the Nadel receivership reached a settlement to recover $100,000 from Girls Inc. of Sarasota County and also fended off a bid by the late Nadel's wife to obtain $27,500 from frozen bank accounts.

Sarasota money manager Nadel, dubbed a "mini-Madoff," bilked hundreds of hedge-fund investors out of $162 million in what prosecutors called a classic Ponzi scheme.

He died in April at age 79 while serving a 14-year prison sentence in North Carolina.

Some 340 investors who lost money in the scheme received checks in May totaling $26 million, or 20 percent of their losses. It marked the first disbursement of funds since Nadel's scam imploded in January 2009.

The Nadel receivership, tasked with raising money for burned investors, has seized and sold assets, sued investors who reaped so-called "false profits," and pushed lawsuits against banks and law firms that dealt with Nadel.

The receivership, headed by Tampa attorney Burton Wiand, has gathered some $34 million so far. It has authorized $131 million in claims.

This month, Wiand settled his case against Girls Inc. for $100,000, a fraction of the $472,839 the charitable organization received from a Nadel-owned foundation that was funded by his scheme.

Girls Inc., which provides after-school, summer camp and other programs for girls, was not an investor in the hedge funds.

Wiand said he accepted the lower amount after reviewing the organization's ability to pay.

"A judgment against Girls Inc. would in all likelihood be uncollectible," he said.

The settlement calls for Girls Inc. to pay $10,000 now and the balance via monthly payments of $2,094 through October 2016.

The receivership has found more than $2.5 million in donations made to charities and non-profits by the Guy-Nadel Foundation. It is trying to recover $410,000 from the Diocese of Venice and $353,000 from the Sarasota Opera Association. Both groups are fighting the so-called clawbacks.

In another matter, last Thursday U.S. District Judge Richard Lazzara rejected the effort by Marguerite "Peg" Nadel to get access to money in three bank accounts.

Acting as her own attorney, Nadel filed a motion in June to tap $23,500 in funds in two accounts at Northern Trust Bank in Sarasota and $4,500 from an account at a North Carolina bank.

She argued that the money came from her personal funds and did not represent proceeds from the Ponzi scheme. She cited recent health problems and the need to pay up to $800 every three months for medications she could not otherwise afford.

In opposing the motion, Wiand argued the money in the bank accounts did come from the scheme. He said Marguerite Nadel was paid $1.2 million as an employee of Nadel's Scoop Management from 2002 through 2008, even though her job consisted of "baby-sitting" other employees and performing administrative tasks.

Meanwhile, the receivership also is chasing several potential deep pockets with lawsuits against Wells Fargo & Co. and prominent Tampa-based law firm Holland & Knight.

One suit claims Wachovia Bank, now owned by Wells Fargo, allowed Nadel to set up "shadow" bank accounts that he used to carry out the scheme. Wells Fargo denies the charges, and at one point tried unsuccessfully to get the judge to remove Wiand as receiver.

Another suit, set for trial in Sarasota in October, claims professional malpractice by Holland & Knight, which reviewed some of the prospectuses for the hedge funds. The law firm also has denied any wrongdoing.

The receivership has incurred more than $6.2 million in legal fees and costs through Nov. 30, the most recent period approved for payment by Judge Lazzara.

The Wiand Guerra King law firm has been paid $3.5 million, while Wiand has received more than $480,000. The receivership began its work in late January 2009.

Contact John Hielscher at 361-4875, fax to 361-4880 or email john.hielscher@ heraldtribune.com.

<p>It has been 3 1/2 years since the Arthur Nadel Ponzi collapsed, but battles over money from the scheme continue to play out in federal court.</p><p>In recent days, the Nadel receivership reached a settlement to recover $100,000 from Girls Inc. of Sarasota County and also fended off a bid by the late Nadel's wife to obtain $27,500 from frozen bank accounts.</p><p>Sarasota money manager Nadel, dubbed a "mini-Madoff," bilked hundreds of hedge-fund investors out of $162 million in what prosecutors called a classic Ponzi scheme.</p><p>He died in April at age 79 while serving a 14-year prison sentence in North Carolina.</p><p>Some 340 investors who lost money in the scheme received checks in May totaling $26 million, or 20 percent of their losses. It marked the first disbursement of funds since Nadel's scam imploded in January 2009.</p><p>The Nadel receivership, tasked with raising money for burned investors, has seized and sold assets, sued investors who reaped so-called "false profits," and pushed lawsuits against banks and law firms that dealt with Nadel.</p><p>The receivership, headed by Tampa attorney Burton Wiand, has gathered some $34 million so far. It has authorized $131 million in claims.</p><p>This month, Wiand settled his case against Girls Inc. for $100,000, a fraction of the $472,839 the charitable organization received from a Nadel-owned foundation that was funded by his scheme.</p><p>Girls Inc., which provides after-school, summer camp and other programs for girls, was not an investor in the hedge funds.</p><p>Wiand said he accepted the lower amount after reviewing the organization's ability to pay.</p><p>"A judgment against Girls Inc. would in all likelihood be uncollectible," he said.</p><p>The settlement calls for Girls Inc. to pay $10,000 now and the balance via monthly payments of $2,094 through October 2016.</p><p>The receivership has found more than $2.5 million in donations made to charities and non-profits by the Guy-Nadel Foundation. It is trying to recover $410,000 from the Diocese of Venice and $353,000 from the Sarasota Opera Association. Both groups are fighting the so-called clawbacks.</p><p>In another matter, last Thursday U.S. District Judge Richard Lazzara rejected the effort by Marguerite "Peg" Nadel to get access to money in three bank accounts.</p><p>Acting as her own attorney, Nadel filed a motion in June to tap $23,500 in funds in two accounts at Northern Trust Bank in Sarasota and $4,500 from an account at a North Carolina bank.</p><p>She argued that the money came from her personal funds and did not represent proceeds from the Ponzi scheme. She cited recent health problems and the need to pay up to $800 every three months for medications she could not otherwise afford.</p><p>In opposing the motion, Wiand argued the money in the bank accounts did come from the scheme. He said Marguerite Nadel was paid $1.2 million as an employee of Nadel's Scoop Management from 2002 through 2008, even though her job consisted of "baby-sitting" other employees and performing administrative tasks.</p><p>Meanwhile, the receivership also is chasing several potential deep pockets with lawsuits against Wells Fargo & Co. and prominent Tampa-based law firm Holland & Knight.</p><p>One suit claims Wachovia Bank, now owned by Wells Fargo, allowed Nadel to set up "shadow" bank accounts that he used to carry out the scheme. Wells Fargo denies the charges, and at one point tried unsuccessfully to get the judge to remove Wiand as receiver.</p><p>Another suit, set for trial in Sarasota in October, claims professional malpractice by Holland & Knight, which reviewed some of the prospectuses for the hedge funds. The law firm also has denied any wrongdoing.</p><p>The receivership has incurred more than $6.2 million in legal fees and costs through Nov. 30, the most recent period approved for payment by Judge Lazzara.</p><p>The Wiand Guerra King law firm has been paid $3.5 million, while Wiand has received more than $480,000. The receivership began its work in late January 2009.</p><p><i>Contact John Hielscher at 361-4875, fax to 361-4880 or email john.hielscher@ heraldtribune.com.</i></p>